Warner Bros. Discovery (WBD), the parent company of HBO Max, CNN, and TNT, announced on Monday that it intends to split into two separate entities by mid-next year. This decision represents a strategic response to the rapidly changing media landscape and the challenges associated with a diminishing audience.
The upcoming division will create one company that will oversee Warner’s studios and streaming services, which include HBO Max, the DC Comics franchise, and film production and distribution. This segment will be led by WBD CEO David Zaslav. The second entity will encompass WBD’s television networks, such as CNN and Discovery, and will be headed by Chief Financial Officer Gunnar Wiedenfels, tasked with managing much of WBD’s current debt.
“By operating as two distinct and optimized companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s evolving media landscape,” Zaslav stated.
This move is anticipated to spur a new round of mergers and acquisitions in the traditional television industry, which has faced significant challenges as viewers increasingly abandon cable in favor of streaming services and social media platforms like TikTok.
WBD’s choice mirrors Comcast’s decision announced last year to spin off its cable networks, including CNBC, MSNBC, E!, Syfy, Golf Channel, USA, and Oxygen, into a new entity called Versant. Comcast is the parent company of NBCUniversal, which oversees NBC News.
This announcement aligns with previous reports suggesting WBD was moving toward such a division as Zaslav worked to improve the company’s financial stability. In December, WBD revealed a restructuring plan that many considered a precursor to this complete separation.
Zaslav’s tenure at the helm of WBD has been tumultuous, marked by scrutiny following the merger in 2022. Within months of its formation, there were speculations about potential sales, and he faced criticism for canceling near-complete movie projects and for the abrupt end of Chris Licht’s leadership at CNN after just one year.
WBD’s stock has been hit hard by Wall Street, plummeting around 60% since Zaslav took over. However, shares saw an 11% increase during Monday’s trading following news of the planned split.
Bank of America analysts recently noted that WBD was “not working as a publicly traded entity” and indicated that “transformative changes” are essential, despite recognizing the “tremendous value” of WBD’s core media properties.
During a call with investors on Monday morning, Zaslav mentioned that the company would evaluate the future of its streaming sports initiatives, acknowledging that they have not significantly contributed to HBO Max’s performance. Recently, WBD lost the NBA broadcasting rights to NBCUniversal and Amazon’s Prime Video.